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On Tuesday, March 13, 2012 Federal Student Aid’s Central Processing System sent out a notice to all those early FAFSA filers who indicated that they “will file” but have not yet completed their 2011 Federal Income Tax Return, on their 2012-2013 FAFSA. The message left some FAFSA filers wondering if they had missed the traditional April 15, 2012 Federal Income Tax Filing deadline. An Ed official who spoke on the condition of anonymity stated “this was just an early April Fools joke.” Nonetheless, it’s always good practice to proofread your email communications to students before hitting the send button.

When you completed your 2012-2013 Free Application for Federal Student Aid (FAFSA), you indicated that you were going to file your taxes and were providing estimated 2011 tax information. Now that the federal tax filing deadline has passed and you have probably filed your 2011 tax returns, it is time for you to update your FAFSA. You can update your FAFSA at www.fafsa.gov. You should change your answer on the FAFSA (question 32) to reflect that you have “already completed” your tax return. Once you’ve made this change, you will need to update the information you initially reported on the FAFSA to reflect the actual information from the 2011 tax return you filed. If you filed a federal tax return with the IRS, when you access your FAFSA online, you may be eligible to use the IRS Data Retrieval Tool, which is the best and easiest way to provide accurate tax information. With just a few simple steps, you can view information from your IRS tax return and transfer that information directly into your FAFSA.
If you are unable to use the IRS Data Retrieval Tool, you are still required to update the income information on your FAFSA so that it reflects the information on the 2011 tax return you filed. The tax-related questions you should review on your FAFSA include adjusted gross income, income tax paid, number of exemptions, and income earned from work. You should also ensure that your FAFSA correctly identifies the type of tax return that was filed (IRS 1040, 1040A, 1040EZ, foreign tax return, etc.) and that you have entered the correct amounts for Additional Financial Information (questions 43a-f) and Other Untaxed Income (questions 44a-j).
It is important that you make the necessary changes to the tax information so that your FAFSA includes the same information that was included on your tax return. However, when making corrections based on your completed federal tax returns, do not update other information that was correct at the time you filed your FAFSA. For example, do not change your answer for household size (question 93) or for number in college (question 94); unless your answer was incorrect as of the date your FAFSA was originally signed.
Your ability to receive federal student aid can be impacted if you do not make the necessary updates or corrections.
Thank you for your attention to this important matter. If you have additional questions regarding the IRS Data Retrieval Tool, online help is available. Visit www.fafsa.gov and click the “Browse Help” feature on the FAFSA home page for information on the tool and the FAFSA process.

Just days after NASFAA released it’s overly complicated version of an IRS Tax Return Transcript Matrix exclusively to NASFAA members, David Bergeron and the good folks at FSA made good on their promise to release one to the FSA community. In a simple to use, one page Excel document, the Ed version, compares the seven ISIR information items that may need to be verified for a student or parent who filed or will file a 2011 Federal Income Tax return to the item name reported on the IRS Tax Return Transcript as well as the corresponding line item numbers from the three 2011 IRS tax returns.

The February 24th, 2012 Electronic Announcement offers some guidance on interpreting the transcript as well – so aid administrators, pay attention:

…for some items the transcript may report two or three values. This is because the IRS calculates or recalculates the amount reported by the tax filer for some items. If only one value is reported on the transcript that value must be used for verification. If more than one value is reported on the transcript, the value associated with the item name that includes the words “Per Computer” must be used for verification. The “Per Computer” line should be used for verification even if it is different than what was reported by the tax filer.